World Energy Outlook- solar leads

The International Energy Agency’s World Energy Outlook 2020 says the pandemic will have had  major global impacts in energy terms.  Global energy demand is set to drop by 5% in 2020, and energy investment by 18%. The impacts vary by fuel, with estimated falls of 8% in oil demand and 7% in coal use, but only a 3% fall in gas demand, while global electricity demand looks set to be down by a relatively modest 2% for the year. 

In climate terms, that means that energy-related CO2 emissions fell by 7%, aided by the fact the renewables showed a slight increase despite the pandemic. As a result, there is expected to be a 2.4 gigatonne decline in annual CO2 emissions, taking them globally back to where they were a decade ago, although there may not have been a similar fall in 2020 in emissions of methane, a powerful greenhouse gas, from the energy sector, despite lower oil & gas output.

So there is still a way to go to achieve climate targets. Although the pandemic and its aftermath cut demand and suppressed emissions, the IEA warns that ‘low economic growth is not a low-emissions strategy. Only an acceleration in structural changes to the way the world produces and consumes energy can break the emissions trend for good.’ To that end, it looks to ‘a step-change in clean energy investment, in line with the IEA's Sustainable Recovery Plan,’ i.e. investment-led green growth (of around $1 Trilion p.a.), an idea which it says ‘has not featured prominently in the plans proposed to date, except in the European Union, the United Kingdom, Canada, Korea, New Zealand and a handful of other countries.’ The IEA claims it ‘offers a way to boost economic recovery, create jobs and reduce emissions’.

To achieve the very ambitious goal of ‘Net Zero Emissions by 2050’, a 40% reduction in emissions would be required by 2030, with low-emissions sources having to provide nearly 75% of global power generation.  It sees renewables playing a key role in this and in energy supply generally: ‘Renewables grow rapidly in all our scenarios, with solar at the centre of this new constellation of electricity generation technologies. Supportive policies 

and maturing technologies are enabling very cheap access to capital in leading markets. With sharp cost reductions over the past decade, solar PV is consistently cheaper than new coal- or gas fired power plants in most countries, & solar projects now offer some of the lowest cost electricity ever seen’. 

That shows up in its 2040 projections- solar leads, followed by wind. IEA’s Executive Director, Dr Fatih Birol, said that, with its costs falling, ‘I see solar becoming the new king of the world’s electricity markets’. And certainly, solar does well. In the IEA’s SDS (Sustainable Development) scenario, PV solar supplies 8,000TWh by 2040, wind around 7,000TWh. However, there is also some nuclear still in there. Indeed, it would expand, with 140 GW of new nuclear capacity being built by 2030 under SDS.  By 2040, nuclear capacity increases to 599 GW and global nuclear output reaches 4,320 TWh, up 55% from 2019. There would also be some fossil CCS. 

Will all that help us meet climate targets? It’s all led by renewables and to make that viable, the IEA says that power grid upgrades and expansion are vital. However, on current global/national plans it will still not be enough: the IEA sees emission only falling slightly in the decades ahead, although China’s new plan will help.  But even on the IEA’s ambitious SDS, the world still only gets to zero carbon by 2070.   So it looks at what would be needed to get to net zero by 2050 and says it ‘would require a set of dramatic additional actions over the next 10 years. Energy companies, citizens and investors all need to be on board – with unprecedented contributions to make’. Specifically, it says ‘getting to net zero means ramping up clean technology deployment while continuing to reduce costs, especially through innovation for hydrogen and other low-carbon fuels, battery storage & CCUS’.  So, as well as further acceleration of renewables, there would be more low carbon sources too- more nuclear and more CCS/carbon removal.  

Solar leads 

The IEA has been relatively conservative in the past, with its projections for green energy often being low, for PV solar especially. But it has now to deal with the changed reality that renewables are cheap and booming. As Carbon Brief says in an excellent review of the IEA report, the IEA confirms that ‘solar is now cheapest electricity in history’ and its main scenario has 43% more solar output by 2040 than it expected in its 2018 review.

So now with renewables accelerating, the IEA has them meeting 80% of the growth in global electricity demand by 2030, and maybe then almost catching up with the projections from the International Renewable Energy Agency, which has renewables supplying around 86% of global power by 2050. However these projections are still some way off from the levels in the scenarios emerging from academics at Stanford and elsewhere, who look to renewables supplying 100% of all energy globally by then, with no nuclear or CCS. That assumes a vast acceleration of renewables, but also a big cut in demand and major energy efficiency gains. 

With renewables currently supplying around 27% of global electricity, but only about 11% of total energy, there is a very long way to go. However, over 60 countries already get 50% or more of their power from renewables and the battle to get beyond that goes on, with the emphasis shifting more to heat and transport energy, and also to wider biodiversity impact issues.  Sometimes the latter leads back to old familiar arguments concerning the eco-impacts of renewables. While their global eco/climate impact are clearly low, some local impacts may well need attention, for example in relation to wild life impacts. What is interesting is that, nowadays, economic arguments seem to figure less: renewables are cheap and getting cheaper. So its their local eco impact issues that matter more. However, as I explore in my next Post, for most of them there are solutions, reducing or avoiding environmental impacts.